Australian Investors Podcast Step by step guide to selecting a managed fund
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May 19, 2025 Daryl Wilson, from Affluence Funds Management, shares insights into effectively selecting managed funds and constructing portfolios. He breaks down the nuances of strategic and tactical asset allocation, discussing when to adapt exposure based on market conditions. Daryl emphasizes the importance of aligning fund managers' interests with investors’ goals while recognizing value versus growth styles. He also offers a contrarian perspective on investing in small-cap opportunities amidst market shifts, making the complex world of fund management accessible and engaging.
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Large vs Small Cap Valuation Split
- Current market shows a stark valuation divergence: large caps expensive, small and micro caps extremely cheap.
- Cheap small-cap names can deliver high returns with modest improvements because expectations are already low.
Set A Clear Return Target First
- Define a realistic long-term return target and test it against historical asset-class returns.
- Use that target to build a neutral strategic asset allocation that becomes your portfolio's 'true north'.
Use Wide Allocation Ranges
- Give your fund ranges wide allocation bands so you can overweight where you find value across a cycle.
- Adjust allocations slowly but substantially across full cycles rather than reacting to short-term moves.